#How to withdraw money from PF for Housing Loans

[newstodaybuzz-blog]

You may soon be able to withdraw 90% of your EPF money to buy your dream home

You may soon be able to withdraw 90% of your EPF money to buy your dream home

NEW DELHI: Government will amend EPF scheme to enable around 4 crore members of retirement fund body EPFO to withdraw up to 90 per cent of their fund for making down payments while buying homes, Parliament was informed today.

The amendment in the scheme will also allow the Employees’ Provident Fund Organisation (EPFO) subscribers to use their EPF accounts for paying equated monthly instalments…

[wizelywizeup]

What is EPF Scheme and How to Check Your PF Balance?

When you retire, your salary stops, but your expenses don't. Ensuring your daily expenses are taken care of and that your lifestyle is maintained as before, a good retirement corpus is necessary. This is where the Employee Provident Fund comes to the rescue.

The Employee Provident Fund (EPF) helps people save up sufficient for their retirement. It was introduced with the Employees' Provident Funds Act in 1952 & managed by the Employees' Provident Fund Organisation.

An employer's contribution towards the employee's EPF account is 12% of the salary (basic plus salary dearness allowance retaining allowance). The EPF is regarded as a low-risk investment as Government of India manages it and assures a fixed rate of return.

The employee also has the choice to contribute more to his/her EPF account. There is no such prescribed value to which employees can contribute towards EPF as per the law. The contribution over the mandated 12% goes towards the Voluntary Provident Fund (VPF). VPF contributions also earn tax-free interest income.

The Employee Provident Fund contributes into two parts:

If you are a man, you have to contribute 10-12% of your basic salary.

If you are a new woman employee, it is 8% of your basic pay for the first three years, and after that, it becomes 10-12% of your basic salary.

Benefits of EPF

The Employee Provident Fund extends an array of benefits. It helps get financial stability and security in salaried employees.

Capital Gains - The PF online scheme offers pre-fixed interest on the deposit and rewards at maturity, further ensuring growth in the employees' funds to accelerate capital growth.

Emergency Fund - Uncertainties are a part of life. Therefore, being financially prepared is the best an individual can do to deal with difficulties. An EPF helps as an emergency fund when an individual requires emergency funds.

Tax Benefits- Under Section 80C of the Indian Income Tax Act, employees' contribution towards their PF account is deemed eligible for tax exemption. Moreover, earnings generated through the EPF scheme are exempted from taxes.

Under What Circumstances can EPF be Withdrawn?

Individuals may opt for either partial/complete withdrawal of EPF. But such departures can be made under specific conditions.

Here is when individuals can completely withdraw their EPF:

On retirement.

If their unemployment extends to more than two months.

While switching from one profession to another or in between jobs. But remember, that the duration of unemployment should be more than two months.

Here is a list of events under which individuals can withdraw EPF partially:

For a wedding.

For higher education.

For purchasing land or constructing a house.

Repayment of home loan.

Renovating a housing property.

How to Check Your EPF Balance?

You can check the balance of your EPF account online in two ways:

Through the EPFO website: You can use the EPFO website to view your PF passbook. You can also print the details if you need them.

Visit the site - www.epfindia.gov.in

Click on 'Our services' and choose 'For employees'

Go to 'Services' and select the 'Member passbook' option

Type your UAN and password to view your passbook ​

2. By Sending a SMS: You can view the message in a variety of Indian languages, including English and Hindi. If you want it in other languages, use the first three letters of your desired language instead of 'ENG'. For example, for receiving updates in Punjabi, you type - EPFHO UAN PUN. The facility is only available after integrating your UAN with your KYC details, i.e. Aadhaar or PAN or bank account details.

3. By Giving a Missed Call: Give a missed call to 011-22901406 from your registered mobile number. You'll receive an SMS containing your EPF balance. This service is also only available upon integrating your UAN with your KYC details.

You can be assured of your retirement money from the EPF scheme. And throughout your career, if you've moved jobs, you can be assured of availing the provident fund's benefits under the same account.

Source: https://wizely.in/wizeup/employees-provident-fund-definition-benefits-check-balance

[braydenjollie]

Top 10 Tax Saving Investment Options In India

There are some ways to save lots of tax, the foremost common ways to take a position in Mutual Funds or Equity Funds. Nowadays, there's another quite tax-saving investment option in India, which is you'll invest in Fixed Deposits with banks. it's called a Tax Saving investment option. all folks must save our tax and it's mandatory to save lots of our tax once we want to shop for a house or invest in any quite an investment. But in India, there's a change, which has been happened within the sort of GST, which has been impacting the general market and most of the people have lost their confidence within the market. many of us are taking loans from banks and other Financial Institutions, due to the bad market condition.

AYP can help you with all this stuff they are also recognized one of the best online consultants in Agra for investing related purposes.

Tax saving bond

There are tax-saving investment options in India which will offer you a particular amount of interest on your investment that has already been made and is getting used to pay tax. If your investment is enough and has not been withdrawn, it'll be tax saving investment option that you simply have immediately . Tax saving bond may be a quite investment option which will offer you interest on the funds you have already got . In this, you'll pay tax on a hard and fast income. In short, you'll tend a hard and fast amount of return as long as your investment during this instrument is maintained. you'll pay the tax on this amount monthly , year then the fund is closed for receiving further income for your financial needs.

Tax-free investments

Every person who owns a house or house apartment needs life assurance . there's no tax on the premium purchased life assurance . there's no tax if you invest in LIC. But the utmost you'll invest is Rs 1.5 lakh in LIC and each year you'll increase the limit of your LIC investment. In 2017-18, the limit was increased to Rs 2 lakh, but to avail of the tax-saving, you've got to form the premium payment on time. Investment in PPF is additionally tax-free. Under Section 80C of the tax Act, if you invest your money in PPF then the interest on PPF is tax-free investments and it's not taxable., the minimum amount that you simply can invest is Rs 500 and just in case you transcend that limit then there's a tax. However, maximum tax saving is just in case you invest in other investments.

Tax saving on open-end fund

If you're an investor and you would like to save lots of on the taxes of open-end fund investments then you ought to believe the tax saving within the Indian market. you'll save tax on your investments in mutual funds through tax-saving instruments. There are three sorts of tax savings that you simply can accompany within the market which are SEBI A, B, and C. SEBI A is zero tax on dividend income. SEBI B may be a 1.5% tax on fund house profit. SEBI C may be a 2% tax on total dividend income. Tax Saving with Tax Saving Bonds One can save the taxes of your bond investments if you purchase these as per tax-saving offers offered by the tax department. As such, the income of dividends isn't taxed but interest income is taxed.

Tax saving options in India

What are tax-saving investments? There are numerous options available in India for tax-saving investment, i will be able to mention a number of them below:

Tax-Free Bonds: Tax-Free Bonds are an investment option that gives tax benefits to investors by way of – Tax exemption – Voluntary disclosure – Interest earned is exempt from taxes

NSC/National Saving Certificate: NSCs are the perfect option for tax-saving investment. NSC may be a tax-saving bond that's issued by the Federal Reserve Bank of India within the name of each salaried citizen. To avail of the advantages under this scheme, you would like to get a minimum of Rs 1,000 in NSC. you'll earn up to 10% interest annually from these savings bonds. this is often the simplest tax-saving investment option available in India today.

How to get maximum tax saving through investments

Tax saving instruments like equity funds, bonds, mutual funds, and life assurance plans need to be invested consistent with the investment objective and you would like to try to to this to save lots of maximum tax.

Let’s take a glance at how the investment plan must be devised and what are tax-saving investment options available to you to save lots of maximum tax.

Equity funds

Equity funds are managed by experts who have a bit of in-depth knowledge about the market and are required to pick the proper funds for your portfolio. It means you'll choose funds supported your financial position and goals. As a result, if your investments are in equity funds, you're sure to earn higher returns as compared to the other investment option within the market.

Fixed deposits

As I said before, a hard and fast deposit is an investment option that you simply can choose supported your financial position and goals. This investment option comes with the characteristics of the bank account . The FD rate of interest in India is presently around 8-10% p.a. and that’s the rationale why FDs are popular among the low incomes class of Indians.

Public Provident fund

PF may be a tax-saving investment option that you simply can choose supported your financial position and goals. PF has the characteristics of a bank account and its interest is paid monthly like other savings accounts within the country.

National Savings Certificate

NSC may be a tax-saving investment option that you simply can choose supported your financial position and goals. Interest on these certificates is said on an equivalent date as that of the tax return of the individual.

Sukanya Samriddhi Yojana

this is often an investment scheme where you'll invest till Rs 1 crore per child. Interest on these certificates are often declared quarterly like other fixed deposits within the market.

However, once you invest money during a savings scheme, like recurring deposit, recurring deposit for business, or fixed deposit, or another one, after the initial return, your investment grows in money. When the investment grows in its maturity period, you'll withdraw the quantity . But there are some tax-saving investment options that you simply can choose . If you've got a pension plan and you've got an inflation-linked bond, then it's an excellent investment option for you. There are some tax saving investment options in India like equity-linked saving schemes (ELSS), UTI open-end fund , tax saving on open-end fund , equity-linked savings scheme (ELSS), mutual fund, tax saving on equity open-end fund , tax saving in equity open-end fund , stocks and options, open-end fund and open-end fund for housing. For assistance associated with tax saving, you'll contact us.

[supervidyavinay]

The Employees' Provident Fund (EPF) rules allow you to withdraw from your EPF account for various reasons. You can withdraw money from your EPF account upon retirement after attainting the age of 55 years. You can also withdraw money from your EPF account for various purposes before retirement.These include purchasing a house, child's wedding and education, and funding financial emergencies caused due to the coronavirus-induced lockdown. You are also allowed to file a claim due to job loss or after you leave your job. However, before filing a claim, you should make sure that the prescribed conditions under the EPF scheme are met.Eligibility to file withdrawalPuneet Gupta, Director, People Advisory Services, EY India lists out the basic conditions that must be satisfied by an EPF member before filing for applicable advance or withdrawal from the EPF account: Reason for partial withdrawal/ advance When Purpose Maximum amount that can be withdrawn Education After 7 years of EPF membership Education of son or daughter after class 10 50% of employee’s share of contribution with interest only Marriage After 7 years of EPF membership Marriage of self, son/daughter, brother/sister 50% of employee’s share of contribution with interest only Purchase of land for construction of house After 5 years of EPF membership Land should in the name of individual and / or spouse Least of the following: (a) 24 months’ basic wages and dearness allowance of member; or (b) Member’s share of contribution along with employer’s contribution and interest; or (c) Actual cost towards acquisition of the site Purchase of house / Construction of house After 5 years of EPF membership House should in the name of individual and / or spouse Least of the following: (a) 36 months’ basic wages and dearness allowance of member; or (b) Member’s share of contribution along with employer’s contribution and interest or; (c) Total cost of construction Renovation of house After 5 years from the date of completion of the of the house House should in the name of individual and / or spouse Least of the following: (a) 12 months’ basic wages and dearness allowance of member; or (b) Member’s share of contribution along with interest Medical emergency (For e.g. cancer, TB etc.) - For specified medical treatment of self and family member Least of the following: (a) 6 months’ basic wages and dearness allowance of member; or (b) Member’s share of contribution with interest Non-receipt of wages - Employee has not received wages for more than 2 months continuously (for reasons other than strike) Employee share with interest Job loss - Un-employed for a continuous period of not less than a month Up to 75% of the EPF balance i.e. member’s share, employer’s share and interest Balance 25% can be withdrawn after remaining unemployed for continuous period of two months To meet pandemic related financial exigencies (For e.g. Coronavirus) - If the area is declared to be affected by epidemic or pandemic Least of the following: (a) 3 months’ basic wages and dearness allowance of member; or (b) 75% of EPF balance i.e. member’s share, employer’s share and interest Repayment of housing loan After 10 years of EPF membership Loan should in the name of individual and / or spouse Least of the following: (a) 36 months’ basic wages and dearness allowance of member; or (b) Member’s share of contribution along with employer’s share of contribution (c) Amount of outstanding principal and interest of the said loanincluding the interest; or Withdrawal within one year before the retirement After attainment of 54 years of age by the member or; Within 1 year before his/ her actual retirement on superannuation, whichever is later Any purpose Upto 90% of the EPF balance i.e. member’s share, employer’s share and interest Withdrawal for investment in Varishtha Pension Bima Yojana After attaining the age of 55 years Amount to be transferred to the Life Insurance Corporation of India for investment in Varishtha Pension Bima Yojana Upto 90% of the EPF balance i.e. member’s share, employer’s share and interest Other than the above mentioned reasons, an individual can also claim applicable advance or withdrawal from the EPF account under the following circumstances:a. Withdrawal/ financing for purchase of house or construction of house including acquisition of site from the Central Government, State Government or a Housing Agency under a notified Housing Scheme;b. Withdrawal/ financing for purchase of house or construction of house including acquisition of site from the Central Government, State Government or a Housing Agency under a notified Housing Scheme - for a member of a co-operative society or a registered society having 10 or more members;c. Where establishment has been locked out or closed down for more than 15 days and the employees are unemployed without any compensation;d. Where member is discharged or dismissed or retrenched by the employer and such discharge or dismissal or retrenchment is challenged by the employee in a court;e. Where establishment has been locked out or closed down for more than 6 months and the employees continue to remain unemployed without any compensation;f. Where member is affected by calamity of exceptional nature such as floods, earthquake or riots;g. Where members are affected by cut in the supply of electricity in the establishment;h. For purchase of the equipment required by physically handicapped member.Documents required for filing claim onlineGupta says "To file an EPF withdrawal claim online, you are not required to submit any documents, however, the scanned copy of cheque/ passbook has to be uploaded on the Member e-Sewa portal."He adds, "The bank account number, IFSC and name should be visible on the scanned copy of the cheque and should be readable. EPFO can reject the claim application if the scanned copy of the cheque is not readable."Checklist to file withdrawal from EPF account onlineOnce you have ensured that the conditions (minimum membership requirement, etc.) for the purpose for which claim is being filed are satisfied, certain additional eligibility conditions must be satisfied to be eligible for filing a claim online.These conditions are as follows:A) Universal Account Number (UAN) must be activated;B) Aadhaar number should be linked and verified with UAN;C) Bank account with correct IFSC should be seeded with UAN;D) EPF account must be KYC-compliant;E) Mobile number linked with Aadhaar should be active;F) In case of retirement, correct date of birth should be updated in the EPFO records.Gupta says "It is important to have the correct date of birth seeded in the records of EPFO for availing the Provident Fund and Pension benefits."Step-by-step guide to file EPF withdrawal claim onlineStep 1: Visit Member e-Sewa portal https://ift.tt/2l8mi4m on the EPFO portalStep 2: Log in to your account by entering UAN, password and captcha codeStep 3: Once logged in, click on 'Claim (Form-31, 19, 10C & 10D)' under the 'Online Services' tab.Step 4: A new tab will open where you will be required to enter the correct bank account number (seeded with UAN). Click on verify.Step 5: Once your bank account details are verified, you will be required to confirm terms and conditions as stated by the EPFO.Step 6: Click on 'Proceed For Online Claim'.Step 7: From the drop-down menu, you will be required to select the reason for applying for withdrawal from your EPF account. Only those options will be visible for which you are eligible.Suppose, if you are applying for advance for purchase of a house, then ensure that you have completed five years of EPF membership and other specified conditions. Similarly, in case where the claim is filed due to job-loss, then ensure that date of exit is updated in EPFO records before filing a claim.Step 8: Once the reason for withdrawal/advance is selected, you will be required to enter your complete address. For an advance claim, the amount to be claimed is also to be stated. The individual will be required to upload the scanned copy of cheque/ passbook. Do make sure that the scanned copy of cheque/ passbook uploaded is as per the instructions provided by the EPFO. Select the terms and conditions once again. Click on 'Get Aadhaar OTP'.Step 9: A one-time password (OTP) will be sent to your mobile number registered with Aadhaar. Enter the OTP in the required box. Once the OTP is entered successfully, then your claim application will be submitted. Tracking your claim statusTo track the status of your claim, you can log in to your account on the Member e-Sewa portal. The status can be tracked in 'Track Claim Status' under the 'Online Services' tab.After the submission of your withdrawal claim, the EPFO will match the data in its records from the data submitted by you in your online claim form. Once the data matches, the EPFO will process the application and credit the money to your bank account linked with UAN. Points to noteThe online process to file a claim from your EPF account can be done only if your PF money is held with the EPFO. If your PF money is managed by a private trust or your organisation is an exempted organisation, then you have to file the claim process with your employer. from Economic Times https://ift.tt/2V1omgl

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EPF WITHDRAWAL PROCEDURE – KNOW HOW TO DO IT ONLINE

EPF WITHDRAWAL PROCEDURE – KNOW HOW TO DO IT ONLINE

PF or EPF is known as the Employee Provident Fund Scheme. Here the employee contributes a small portion of his/her remuneration i.e. 12% of the basic pay every month. Also, the employer contributes a matching amount with this. This is a saving for the post-retirement use of the employee. Here, we discuss the EPF Withdrawal Procedure in details.

The PF scheme is a savings scheme fully under GOI, Employees’ Provident Fund Organization (EPFO). This retirement fund is for the salaried employees under the Employees’ Provident Funds and Miscellaneous Provisions Act in 1952.

The Funds accumulated till the time of retirement should be withdrawn at the time of retirement only. It usually becomes a source of income after retirement. It is important to mention that EPF organization has made the allotment of Universal Account Number (UAN).

The Universal Account Number (UAN) is compulsory for all the employees covered under the PF Act. The UAN is linked to the employees EPF and is portable throughout the lifetime. Besides, at the time of changing jobs, you just need to apply for an EPF transfer.

Must Read:

EPFO UAN LOGIN REGISTRATION & ACTIVATION ONLINE

EPF Withdrawal Procedure – Know Details Step By Step

You can claim/withdraw your PF online only if you meet the following conditions:

Must have an active UAN number

Mobile number must be registered with the UAN Number

Bank details must be seeded into the UAN Number

PAN and Aadhaar should be fed into the EPFO database

You can withdraw your EPF money either partially or completely – EPF ClaimConditions for Complete withdrawal EPF:

EPF can be completely withdrawn only under certain circumstances.

EPF withdrawal can either be done during the course of the employment or after the retirement of the employee.

You can withdraw 100%, if you remain unemployed for more than 2 months, or when you got retirement.

Also, while switching from one job to another, you can also completely withdraw your EPF money.

Conditions for Partial withdrawal EPF:

Partial withdrawals of the EPF amount are also limited to certain circumstances.

You can also withdraw 75 per cent of your total provident fund money if you are unemployed for 1 month.

You can partially withdraw up to around 50 per cent of your EPF money in case of education, purchase of land, marriage or house construction.

Sl NoParticulars of the reason for withdrawalLimit for withdrawalMinimum service criteriaOther conditions

1

Marriage

Maximum 50% of employee’s  contribution to EPF

7 years

For the marriage of self, son/daughter, brother/sister

2

Education

Maximum 50% of employee’s  contribution to EPF

7 years

For the education of self or his children after class 10

3

Purchase of land/purchase or construction of a house

For land – Max 24 times of monthly wages plus Dearness allowance.

For house – Max 36 times of monthly wages plus Dearness allowance

5 years

The asset i.e. land or the house should be in the name of the employee or spouse or Jointly.

4

Home loan repayment

Maximum 90 %, from both employee’s contribution and employer contribution in Employee Provident Fund.

10 years

The employee or spouse or jointly should be the registered owner of the property.

Withdrawal is permissible by producing requisite documents as needed by the EPFO relating to the housing loan availed.

The accumulation in the member’s PF account (or together with the spouse), including the interest, has to be more than Rs 20,000.

5

Renovation of house

Maximum 12 times of the monthly wages

5 years

The employee or spouse or jointly should be the registered owner of the property.

6

Just before retirement

Maximum 90% of accumulated balance with interest

Once you reach 57 years ( as per recent amendment)

For himself

To withdraw money from EPPF, you need to provide a UAN number, which can be obtained from the employer. However, even without a UAN, you can withdraw your PF amount.

Must Read:

UAN MEMBER PORTAL ONLINE TO UPDATE KYC DETAILS EPF

Here is how you can Withdrawal EPF Online: EPF Claim Online

For PF withdrawal/EPF Withdrawal Procedure you need to first login to the EPFO portal by using your UAN and password. Enter the captcha.

Next, to verify your KYC details, click on the ‘Manage’ tab.

Then select KYC to check whether your KYC details such as Aadhaar, PAN and bank details are correct and verified or not.

Now, from the drop-down list of ‘our services’ select and click on the ‘Claim’ option (Form-31, 19 & 10C).

The ‘Claim’ screen will show the member details, KYC details and other service details. Next enter the last 4 digits of your bank account and click on verify.

Click on “Yes” to sign the certificate of the undertaking and then proceed.

Now, click on “Proceed for Online claim”.

Choose the type of withdrawal claim you want. Select among full withdrawal, partial withdrawal or pension withdrawal, under the section ‘I Want to Apply For’.

Now enter your name along with the registered mobile number, address, PAN card number, reason for leaving and date of joining.

Next, fill the form and submit it.

The PF amount will get credited to your account within 10 days, once approved.

Must Read:

EPF UAN CORRECTION – UPDATE NAME, GENDER, DOB ONLINE

Types of Forms Required for EPF Withdrawal Form – EPF Withdrawal Procedure

For EPF Advance/Partial Withdrawal

To make partial or advance withdrawal of your EPF money, Form 31 is needed.

Firstly you need to activate your UAN, to make a PF withdrawal without your employer’s signature.

Download the EPF Form 31, on the EPFO web portal, to make a partial withdrawal.

Now enter your name (as stated on their UAN, Aadhaar card, and bank account), along with other details like your registered mobile number, address, PAN card number, the reason for leaving and date of joining, on the form, and submit it.

The PF amount will be credited to your account within 10-15 days, once approved.

For EPF Complete Withdrawal/Final Settlement

To make the complete withdrawal of your EPF money, you will need Form 19. This form is also known as ‘Final Settlement form’.

You need to fill this form to withdraw the entire accumulated PF amount at the time of retirement.

You need to fill in the form with your personal details and employment details, including PAN, UAN and Aadhaar Number, bank account details, your date of leaving, the reason of leaving services, date of joining services, and full postal address.

The PF amount will be credited to your account, once approved.

Must Read:

EPFO UAN LOGIN REGISTRATION & ACTIVATION ONLINE

Benefits of EPF Withdrawal Online – EPF Withdrawal Procedure

Online EPF withdrawal claim has some benefits, such as –

Comfortable Withdrawal – Online claim saves you from the hassle of visiting the PF office in person and standing in long queues. You just need to fill the forms online from the comfort of your home and time.

Reduced Processing Time – With online claims, the amount will be processed and credited into your bank account within 10-20 days of the application. The government plans to further reduce the processing time.

No need to meet the previous employer – In offline claim method, you have to get your documents attested by the employer. But in online claim verification is done automatically in online mode. This is the best part for people who have moved to a new city. So it will save them from travelling long distances or the trouble of mailing/correspondence the documents.

[moneyjarin-blog]

Why selecting mutual funds based on past performance is a bad strategy

Mutual funds which were once frowned upon are now a common household name. Investors in India alone have invested more than 23 Trillion Rupees in mutual funds. However, a fair chunk of that money might be riding on wrong assumptions. Here’s the thing, the famous/infamous investment clause “Past performance is not an indicator of future returns” is not on the top of our mind when we decide where to invest our money! Truth be told, you can’t really blame investors for falling into this obvious trap.

Historical return is the single biggest benchmark for promoting and recommending mutual funds in India. A trickle-down effect occurs when fund managers take short-sighted decisions to boost returns. This attracts investors who assume that the short-term returns party would last forever only to be let down.

Usually in life, the best way to predict future behavior is by judging past history. However, this method of forecasting holds no value while evaluating investments.It might seem unreasonable to take the most concrete and real information available to you and ignore it. But you have to!

Why?

Because mutual funds that have shown high returns in the past might have taken on an undue amount of risk to achieve good returns. While they could get away with it during the market upswing, the same strategy could easily backfire when markets take a turn for the worse. If a mutual fund has shown high returns in the near past, there is a risk that the portfolio could be highly overvalued. This would lead to under performance in the future.

What to do?

Moneyjar believes that one should choose mutual funds based on factors other than past performance.

Tell us more!

Before even trying to figure out which mutual fund to invest in, it is important to decide which asset class you wish to invest in and how much risk you are able to take. For the sake of simplicity, let’s assume that your investing period is short and you want lower risk. You would invest in debt funds. On the other end, if you can hold your investment for a longer time period and you are comfortable with higher risk, you would choose equity funds.

The act of choosing an equity or debt fund will help determine most of your future returns. The individual mutual fund you choose will not have a huge bearing on your return.

Once an appropriate proportion of debt and equity is decided, it is important to look at forward-looking qualitative and quantitative indicators to select the best individual mutual funds. Quantitative Metrics include P/E and P/B of underlying equity portfolio, Credit Quality of debt portfolio, Sharpe and Sortino Ratio, Expense Ratio, Max Drawdown, Historical Performance and Rolling Returns over different periods of time, etc. while Qualitative Metricsinclude Fund House Pedigree, Fund Manager Analysis and Outlook, Fund Objective, etc.

Moneyjar understands that it is not practically possible for the everyday investor to adhere to the above approach owing to limited time and skill. We do all the hard work for the user of determining debt/equity ratio and finding best-in-class mutual funds. These funds are tailored for the investor’s specific needs and we constantly monitor your portfolio post-investing. Don’t take our word for it – check us out here.

Also check out this link to learn more about investing: How to start investing?

June 22, 2018

0How to start investing?

So you’re adulting now and you decide that you want to “start planning for your future”, huh? But you have no idea on how to start investing. Alright then! Here’s a step by step guide on how to invest and where

STEP 1 – Medical and Life Insurance:

Firstly, get a good medical insurance policy. If there are people dependent on you, get a great life insurance policy too. We recommend pure term insurance policies (preferably online). No endowment plans and ULIPs! Insurance and Investments should be kept separate.

STEP 2 – Emergency Fund:

Before you start investing, ensure that you have a safety fund. This will be useful during a crisis and unforeseen circumstances. We recommend creating an emergency fund worth 6 months of your typical expenses. Moneyjar helps you create your emergency fund.

STEP 3 – Loans:

Once you have great insurance and emergency fund in place, remember to pay off any high interest educational/personal loans. It does not make any sense paying 12% interest on a loan while earning only 6% in a fixed deposit.

Once you have completed the above steps, you are ready to start investing for your goals.

STEP 4 – START INVESTING

What are your financial goals? (It’s alright if you don’t have a goal and just want to invest in order to allocate money to future goals)

How much risk are you willing to take? (This decision ideally depends on criteria like your age, no.of dependents, investing experience and criticality of goals to name a few.)

Choose a financial adviser (Moneyjar offers a completely online platform where you can get advice, transact and then monitor your investments all in one place. We also provide free advice through phone and chat whenever you need it!)

Figure out different ways for wealth creation. Check out this article for hacks Easy Hacks For Wealth Creation

Now you’re good to go! Happy Investing!

June 2, 2018

0Easy Hacks For Wealth Creation

1. Spend your money through a Credit Card Yes! Don’t be surprised, but remember to pay your bill on time. Use a credit card to pay for your expenses, since you get as much as 50 credit free days. You also accrue miles or rewards points. However, ensure that you have a limit and are prompt with your bill payments.

2. Run a Side Hustle : Each one of us has some talent and the internet allows for monetization of that talent. Put your content online or offer your services on a freelancer website in order to diversify your streams of cash flow!

3. Never let your money rest in a savings account, invest in liquid funds– These are funds from which you can withdraw within a day! You earn higher returns and most importantly,if you can’t see it, you won’t spend it. Try Moneyjar’s Savings jar at https://moneyjar.in/investing/savings-jar

4. Switch from a Fixed Deposit to Debt Mutual Funds: NOW! Higher returns, no lock in and no TDS Deduction. Check Moneyjar’s Safe jar at https://moneyjar.in/investing/safe-jar

5. Save Tax: By investing in Tax Saving Equity Mutual Funds. Moneyjar offers tax saving funds at https://moneyjar.in/investing/tax-saver-jar

May 18, 2018

1

Save Tax With Investments

Have you found yourself running around in February/March desperately trying to make ANY tax saving investment to save your salary form the brutal tax deductions?

PRO TIP! Start planning your tax saving investments from May itself to avoid hasty last-minute decisions and also gain from your investments throughout the year.

Remember the following when making a tax saving investment: The investments mentioned below are for tax deductions. Put simply, they reduce the taxable income.

For example – If your taxable income is ₹9 Lakhs and you make an investment of ₹1 Lakh, you won’t save ₹1 Lakh on tax, instead, your taxable income will be reduced to ₹8 Lakhs. You can save 10% to 30% of your income, depending upon your tax bracket.

Under section 80C you get a limit of INR 1,50,000 each year for tax saving investments. These investments have to be made in the same financial year for which tax is being saved.

A tax saving investment made in a particular year saves tax only for that year.

The investment does not have to be made specifically from the income that needs to be saved. There are no restrictions on the source of investment – it only needs to be made for the current financial year.

There are two parts to each tax saving investment.

The actual amount you invest which results in a reduction of taxable income.

The gains you get from the tax saving investment – Contrary to popular belief, the gains from tax saving investments are not tax-free in most cases.

While there are many deductions available the most common ones is Section 80C

The entire CUMULATIVE limit for the below-mentioned investment products is ₹1,50,000 a year. All of the below investments in totality can’t be more than ₹1.5 Lakhs – for example, you can’t investment ₹1.5 Lakh in PPF and ₹1.5 Lakh in ELSS and claim deduction for both investments. Be careful not to overshoot this mark because you will not save any tax and the investment will be pointless. The most popular tax savers are :

PPF

Employers PF contribution

NSC

Life Insurance Premium Payment

The principal payment of Home loan

5 year Tax Saving Fixed Deposit

ULIPS

ELSS.

We believe ELSS Equity Mutual funds are the ideal way to save tax as they require a short lock-in period (3 years) and offer highest long-term returns.

– Check out Moneyjar’s Tax Saving Jar at https://moneyjar.in/investing/tax-saver-jar

Other than the above-mentioned section, you can further reduce your taxable income if you have paid for Medical Insurance or have incurred specific medical expenditures.

For a full list of tax saving investments, please check out: https://www.charteredclub.com/income-tax-deductions/

May 5, 2018

[wionews]

Robert Mugabe's Zimbabwe is in deep financial mess

Zimbabwe’s financial system increasingly resembles a house of cards. Were one card to give way – for instance, if South Africa’s power utility, Eskom, were to have the temerity to suggest that Zimbabwe actually pays for the electricity that it’s supplying the country – the entire edifice would collapse.

To put it another way, the government is a bust. It is again printing money to cover its spiralling costs, and inflation is rising. And given that there’s an election looming in 2018, Zimbabwe’s ruling party, ZANU-PF doesn’t want to cut-back. Far from it, it wants to carry on spending, as fast as it can.

The rot goes back to the early 2000’s. ZANU-PF profligacy had been fuelled by a continuous cycle of simply printing more money and resultant runaway inflation. Mega-inflation meant that ordinary people lost their pensions and whatever savings they had, as the Zimbabwe dollar lost its value and people resorted to barter or the use of other currencies.

Ultimately, the government faced no choice but to accept reality. In 2008 it scrapped the Zimbabwe dollar in favour of a basket of other currencies, although within a short time, this meant in effect the reign of the US dollar.

“Dollarisation” allowed for the pursuit of more rational policies by the coalition Government of National Unity which followed the disputed 2008 election. However, its control of the electoral machinery ensured that ZANU-PF won a resounding victory in the 2013 election. Within a short space of time, it returned to its familiar policy mix of profligacy, corruption and populist economics.

Yet ZANU-PF faced major problems. Above all, “dollarisation” meant that the cost of Zimbabwe’s exports on international markets was high. Worse, the dramatic collapse in agricultural production since the early 2000s (following the appropriation of white farms) alongside the decimation of the country’s manufacturing industries meant that there was relatively little to export anyway. Tobacco production has recovered a little, but the quality is less than it used to be, so returns are relatively less.

Meanwhile, government insistence that mines should be 51 per cent Zimbabwean owned has done nothing to entice inward investment or boost exports.

In short, the capacity of the economy to earn US dollars by selling goods externally has fallen dramatically, and the supply of money circulating within the country has dried up. Unemployment stands at around 90 per cent.

President Robert Mugabe’s latest response has been to replace finance minister Patrick Chinamasa, who had been warning of the structure’s fragility in ever more urgent tones. The new finance minister is Ignatius Chombo, a party loyalist, who will brook no talk of any need for structural reform.

The bond notes

Faced with a looming crisis, the ZANU-PF government has resorted to three key strategies.

One has been the issue of “bond notes” (of different denominations) by the Reserve Bank of Zimbabwe. Officially, they’re designed to swell the amount of money in circulation within the country. The problem is that apart from having no value outside the country, nobody trusts them as they have been issued by a ZANU-PF government, and it was this government that presided over the hyperinflation.

ZANU-PF’s announcement that it was issuing bond notes was met with a run on the banks as depositors sought to withdraw dollars as fast as they could. Their assumption was that this was a government ploy to reintroduce the Zimbabwean dollar. The Reserve Bank of Zimbabwe responded by limiting the number of dollars individuals could withdraw.

People are reluctant to use the bond notes. But they’re still sometimes forced to accept them because of the sheer shortage of “real” money. As a result, when they can, they rush off to the local bus station where they can sell them for dollars to currency traders – albeit illegally.

The second strategy has been the rapid expansion of country’s ability to manage electronic transactions. Its aim has been to expand the amount of money in circulation without using up “real” dollars.

Accordingly, government employees are now largely paid electronically. Similarly, government employees (and everyone else) now pay nearly all their bills within the country electronically.

And Zimbabweans are rarely able to convert the notional sums of dollars they hold in the bank into real cash – unless they make use of the currency traders in illegal transactions.

Meanwhile, with the rate of inflation continuing to rise combined with the widespread lack of faith in the banks, many Zimbabweans spend their bank balances on consumer goods as quickly as possible rather than attempting to “save”. After all, if times get hard, you won’t be able to get rid of your bond notes, but you may be able to sell your fridge.

Fanciful financial system

But it’s the third strategy which the government has pursued which is really fuelling a fanciful financial system.

Since 2013, government expenditure has steadily increased year by year, despite the country earning very little internationally. The ZANU-PF government may have hoped to fund this by its old trick of literally printing money, that is, by expanding the supply of bond notes.

But such was the negative popular sentiment that the Reserve Bank of Zimbabwe seems to have restricted their issue. Supposedly the issue of bond notes is backed by a USD$200 loan by the Afreximbank, but no-one really knows how many have been issued because the central bank provides no information.

What the government has done instead is to fund its rising costs by issuing treasury bills (whereby the government touts for loans on the capital market against promises of later redemption). No-one in their right mind would want to buy them, but Zimbabwe’s banks today have little option. As inward investment into the country has dried up to a trickle, there is little else for them to spend their money on, and the interest rates that the government promises to pay are, at face value, attractively high.

The coalition government of national unity recorded budget surpluses for three of the four full years in which the opposition controlled the Treasury. For its part, the ZANU-PF government recorded deficits of USD$186 million and USD$125 million in 2014 and 2015. Recently, the then finance minister Chinamasa projected a deficit of USD$1.41 billion for 2017. As of June 30, 2017, there were USD$2.5 billion worth of Treasury bills on the issue.

In other words, the spending will continue. Zimbabwe’s financial system is living on borrowed time and borrowed money. It will again end in financial ruin, as it did in 2008. But all ZANU-PF cares about is ensuring that it wins the next election and allowing its political elite to “eat”.

This article was originally published in The Conversation. Read the original article.

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